November and December are the two most important months of the year for game sales, and Microsoft is working with a key retail partner to get off to strong start this year.
This weekend, GameStop is offering a deal where anyone who buys an Xbox One Bundle will get an extra controller and a free game. But the world’s largest brick-and-mortar game seller is also sweetening the deal. If a customer trades in their Xbox 360, they’ll be able to buy the Xbox One Gears of War: Ultimate Edition bundle, an extra controller, and a free game of their choice for $250. Microsoft is helping to make this deal happen, and that shows the company is seriously about creating value for consumers to convince them to pick up an Xbox One this holiday.
The Xbox One has had a tough year in comparison to the PlayStation 4. Sony’s console has outsold it every month this year in the United States except for April, according to industry-tracking firm The NPD Group. But that doesn’t necessarily mean the trend will continue now that we’re into the gift-giving holiday months.
The importance of the next two months
In 2014, PS4 had also consistently outsold Xbox One heading into November, but Microsoft got aggressive by bundling in games, cutting prices, and just generally offering enticing deals. That was enough to help Xbox One outsell PS4 in both November and December of last year. Those two months make up around half of all game spending at U.S. retailers. December alone had consumers dropping $3.25 billion on hardware, software, and accessories. Compare that to the $541.9 million in spending in July.
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By working hand-in-hand with GameStop, Microsoft is telegraphing that it wants a repeat of last year. It’s putting on its game face because it wants to have the biggest holiday.
And these next two months are really a test for Microsoft and the Xbox. Since June, we’ve heard from Microsoft that this is the “greatest holiday games lineup in Xbox history.” It has exclusives (at least timed) like Halo 5, Rise of the Tomb Raider, Forza Motorsport 6, Rare Replay, and Gears of War: Ultimate Edition. That’s compared to PlayStation 4’s exclusives like Uncharted: The Nathan Drake Collection and not much else.
But that’s the point, if Microsoft is putting up the “greatest Xbox lineup ever” against high-res versions of old PlayStation 3 games and still loses … what does that say about the state of the Xbox brand?
That’s a question Microsoft probably doesn’t want to answer, and that takes us back to the GameStop deal.
Why this trade-in deal makes sense for Microsoft
While Microsoft is focusing on exclusives, Sony has established itself as the premiere destination to play many of this holidays biggest multiplatform releases. That started today with the launch of publisher Activision’s Call of Duty: Black Ops III shooter and Sony’s corresponding Black Ops III bundle. Sony will once again have a big third-party bundle later this month when publisher Electronic Arts releases Star Wars: Battlefront.
Putting a check on the hype Sony is getting for these games that are also on Xbox One is a big reason Microsoft and GameStop are giving away “any” free game to people who buy an Xbox One bundle this week. And really, this is about Black Ops III.
Up until yesterday, Call of Duty was an “Xbox first” franchise. Microsoft had a co-marketing deal with Activision that led to Xbox One and Xbox 360 getting the downloadable map packs for the various Call of Duty games 30 days before PC or PlayStation. Sony swooped in and took that deal for Black Ops III when Microsoft decided to put that co-marketing money into Fallout 4 instead.
But despite Microsoft choosing Fallout over Call of Duty, this latest shooter release is an important one. It’s the latest game from developer Treyarch, which made one of the most popular Call of Duty releases on the last generation in Black Ops II. It is highly likely that a lot of gamers who couldn’t get enough of that Call of Duty are now looking to upgrade to the next generation of consoles today, and Microsoft doesn’t want to lose them.
That’s where the Xbox 360 trade-in bonus comes in. Gamers can get an Xbox One, Gears of War, an extra controller, and Call of Duty: Black Ops III for $250 if they trade in their old machine. That could convince a lot of players to stick with the Microsoft brand.
Of course, this deal is only at GameStop, and a lot of people buy their games and hardware from places like Walmart, Target, or online.
But the final point for why this is a smart move for Microsoft is that GameStop is huge. Last holiday, the retailer was responsible for 28 percent of all Xbox One and PlayStation 4 hardware sold in the world, and 46 percent of game sales went through GameStop.
Those are monstrous market-share numbers that no one else comes close to, and holiday 2015 will likely see a similar split or one that is even more in favor of GameStop.
So Microsoft is making its move. It has waited until the most important months of the year to unleash its biggest games. And now, this weekend, around one in four people will go to GameStop to make their jump to the next generation of consoles. When they go to make their decision, they’ll have a lineup of exclusives to choose from and maybe Microsoft’s incentives will push them over the edge into choosing an Xbox.